NAV on 2017/11/20
|NAV on 2017/11/17
|52 week high on 2017/09/21
|52 week low on 2016/11/25
|Total Expense Ratio on 2017/09/30
|Total Expense Ratio (performance fee) on 2017/09/30
STANLIB Collective Investments (RF) Limited
South African--Real Estate--General
FTSE/JSE South African Property Index (SAPY)
Keillen began his property fund management career at Standard Bank Properties in 2004 managing its leveraged listed property product. He became a listed property analyst at Stanlib in 2005 and now also co-manages the Stanlib Aggressive Income Fund.
STANLIB Property Income comment - Jun 17
The fund underperformed the benchmark by -0.69% during the quarter, delivering a gross total return of 0.22% versus the benchmark return of 0.91%. The top contributors to fund performance were the overweight positions in MAS plc and Rebosis-A. MAS continues to be a core holding and a strong performer in the portfolio. The top detractors were the underweight position in Rockcastle and the overweight position in Accelerate Property Fund. A poor short term growth outlook and associated costs incurred negatively impacted Accelerate in June 2017 as it pursued a defensive long-term strategy, while the merger of NEPI and Rockcastle resulted in Rockcastle’s share price appreciating more than we anticipated in June 2017.
On a total return basis, listed property delivered 0.91% in the quarter, outperforming local equities (-0.39%) and underperforming cash (+1.85%) and local bonds (+1.49%). While bond yields showed no material shift from 8.9% over the quarter, continued concerns around retail spend, a weakening SA economy and political uncertainty continued to weigh on the sector performance. Year-to-date, listed property was the worst performing asset class (2.29% total return), underperforming equities (3.37%), cash (3.72%) and bonds (3.99%). As would be anticipated in a weakening SA environment, the preference of investors for the quarter were stocks with offshore exposure that offered increased defensiveness to a weakening SA environment. Unsurprisingly, Greenbay, NEPI, Redefine International, Sirius and Rockcastle all recorded double-digit total returns for the quarter, ranging between 13%-26%. The fund does have exposure to many of these names, with exposure having increased in the past six months. Sector heavyweight stocks such as Growthpoint (-5.48%) and Redefine (-0.39%) both posted negative total returns for the quarter.
Results reported during the quarter confirmed that the local economic environment remains challenging. Management discussions close to quarter end highlighted rental growth is increasingly under pressure, with rental negotiations becoming increasingly difficult. We believe the trend will be evident sectorwide and anticipate companies will provide increasingly conservative guidance. Outlook
Over the next 12 months, we anticipate 8% distribution growth for the sector’s dividend paying companies. A weakening bias has emerged in the ZAR versus EUR and GBP in the past quarter, reflected in those stocks that have outperformed and continue to outperform. We continue to expect some SA companies with significant offshore exposure to exhibit double-digit distribution growth in ZAR, over the next 12 months. We are positioned for this eventuality and have increasingly positioned our SA property exposure towards SA property companies with defensive SA property portfolios and defensive offshore portfolios.
The STANLIB Property Income Fund aims for the growth of capital and to provide an income source. Investments may consist of property shares, property loan stock, debentures, debenture stock and bonds, unsecured notes, property unit trusts and other listed securities considered consistent with the portfolio's objective. Liquidity may be increased to 50% if deemed necessary by the manager. Exposure to fixed-interest securities is limited to 30%. The portfolio may also invest in the participatory interests of collective investment schemes. This portfolio may not have any direct and/or indirect foreign exposure.